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Technology Stocks : Creative Labs (CREAF)

CREAF 0.470

0.0%

Dec 5 9:30 AM EST

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To: Sun Tzu who wrote (13580)	3/6/1999 7:36:00 AM
From: Gopher Broke	Read Replies (1) of 13925

The DVD upgrade kit comes in two parts. The DVD mechanism itself and the MPEG hardware required for decent real-time movie decoding. Sigma and CCUBE are both in the business or providing the MPEG piece. They provide either decoder silicon (for inclusion in set top boxes, or I guess at some stage built into the DVD drive?) or an MPEG decoder card, which can be bundled with a commodity DVD drive to give the video playback package. The drives themselves are manufactured by various companies - Sigma mentions Matsushita and IBM, CCube mentions JVC, Samsung and LG/Zenith. My guess is that the Sigma OEMs are more targeting the computer DVD market and the CCube are more in the set top arena? Understandibly, if Sigma have Matsushita, IBM and Creaf as their OEMs then they are feeling pretty secure in the PC DVD market. On the other hand CCube, with JVC, Samsung etc as their OEMs, can probably claim that the loss of Creaf was no great problem. So where does Creaf fit? IMO they carve out their usual niche, selling the upgrade kits at retail. Sigma and CCube are not going to compete there. Matsushita will probably do their usual high volume low margin thing. Hopefully IBM and the other drive manufacturers will focus on Dell and other OEM deals. Creaf can then milk the DVD upgrade explosion and make enough money that it really doesn't matter what WS thinks of Sim. Oh yeah, pigs will be flying then too.

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